On Sep 30, 2008, at 4:21 AM, moominek at aol.com wrote:
> Sometimes it is quite difficult to understand US-interiors from
> outside,
> four questions that's why from Berlin:
>
> 1) Is it at all a debate about state intervention "in principle" in
> US-Congres? May be it is more a conflict about who will controll
> this state intervention next - after the election? And the rejection
> of the bailout more a symptom of a republican "Après moi les
> deluge"/"devil may care"-position?
To some degree, but the Republican right hates state intervention, unless it's to enforce morality.
> 2) Isn't some kind of special legislation needed, because the FED is
> already so engaged in stablizing the financial markets, with quite a
> lot of special assets in the balance sheeds?
The Fed has pretty much reached the end of its capacity right now. Recapitalizing the banks will require money from the Treasury. "Dr" Baker's line about the FDIC is legally correct, but they'll need more money soon - and an expansion of their mandate beyond commercial banks.
> 3) Up to this moment I heard as the central motive for the bailout -
> and other plans - to "restore confidence in the markets". Can we
> think of any plan in with broader nationalization of financial firms
> - or including sharp taxing of Wall Street - to reach this aim?
> Would this fit to the importance of private property in the US-
> economy, politics and every day religion?
>
> Revolution need a minimum of "not more able to rule" of the ruling
> class and a minimum of "not more willing to be ruled" in the working
> class. Even a financial meltdown does not in general change the
> relation of forces in society in this direction, at least not in
> european history.
It's going to take a lot to change the relation of forces in this society. A banking crisis won't do it.
> 4) Is this conflict about the bailout at all an interior problem of
> the US? May be it is more a conflict about the interior cost-sharing
> of the =0
> Ainternational position of the US-economy - with consequences for
> others too? Other players - emerging asia, the UK, euro-zone - take
> part in the conflict, not only on the markets.
The rest of the world is suffering from it too. The Johannesburg Stock Exchange had a terrible day yesterday. Several European banks and insurance companies are in trouble - and Europe doesn't have the institutional capacity to deal with the problem. (There's no real central authority, and system stabilization on a grand scale is beyond the ECB's mandate.)